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Woodson Corporation provided the following information regarding its only product: Sale price per unit Direct materials used Direct labor incurred Variable manufacturing overhead Variable selling
Woodson Corporation provided the following information regarding its only product: Sale price per unit Direct materials used Direct labor incurred Variable manufacturing overhead Variable selling and administrative expenses Fixed manufacturing overhead Fixed selling and administrative expenses Units produced and sold $65.00 $160,000 $185,000 $120,000 $70,000 $65,000 $12,000 10,000 Assume no beginning inventory Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 800 units at a sale price of $52 per product? The 800 units would not require any variable selling and administrative expenses. (NOTE: Assume regular sales are not affected by the special order.) A) Decrease by $1,200 B) Decrease by $4,400 C) Increase by $4,400 D) Increase by $78,800
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